Gold continues to hold just above monthly support price at 1180. The strength of the Dollar attributed to the weakness in prices of the yellow metal for the recent weeks but yesterday’s release of a slightly higher than forecast U.S ADP Non-Farm Employment Change data and a weak ISM Non-Manufacturing PMI seems to indicate the start of a weakening Dollar. Although prices now offer a good risk to reward ratio for swing traders to engage in a longing position, U.S Unemployment Claims is bound to be released later in the day where uncertainty continues to pose as a threat. Additionally, tomorrow’s release of U.S Non-Farm Employment Change data is bound to increase volatility in the market which may continue to swing the precious metal in the bearish direction.
Observing the H4 chart, candles now lie near the support at 1180. Paying attention to the Fibonacci Retracement, for a confirmation of a reversal to the bearish run and a better risk to reward ratio for a longing entry, traders should take note of -10.0% at 1174.88. Should candles fail to close below 1174.88, it is possible to engage in a longing position with stop loss placed below 1170 for a swing trade.
Focusing on the hourly chart, candles have shown exhaustion at Fibonacci Expansion 161.8% at 1182.43 after failing to close below for the second time since 28th May. However, with the formation of lower lows as observed on the H4 chart, trend direction continues to remain bearish and without a clear indication of a reversal, it is strongly advised not to engage in any positions especially with the release of various data from the U.S today and tomorrow.